Payments

There will be many long-term changes to behaviour as a result of the Covid pandemic. Many habits, views, and ways of doing things will shift. The world, perhaps, will be seen through a different lens. The books will come, so too in time, when vaccines allow it and the scriptwriters are done, the Hollywood films. One area of debate across the table, involves cash. Actual cash. The notes and coins in our purses and pockets that drift through shops and laundromats and help grease the wheels of commerce. With government guidelines now giving cash a terse ‘hands off’ it is no surprise that ATM volumes, in the UK, fell more than 60% during lockdown. This according to Link, the owners of those cash machines. The UK was not alone. Ideas of a cashless future have always been in the future, but like many things online, Covid appears to have accelerated things by a number of years. This bodes well for companies on the other side of the trade, those companies that offer services that grease the wheels of e-commerce. Many of these payments operators – such as Fiserv – have conversely underperformed the market year-to-date. This tight cohort have likely struggled to find a footing. As large cap names they increasingly compete for investors’ attention with Visa, Mastercard and PayPal and possibly because they don’t fit neatly into either the growth or value buckets. Positioning has also, perhaps, played a part. And yet as economies heal, that same investor attention may begin to shift to ‘reopening plays’ that are less the red meat of travel and leisure, and more a plate of something quality and something growth, all at a decent price. For those taking a shaper interest in the fundamentals of Fiserv, a company that ‘aspires to move money and information in a way that moves the world’, there is an added layer of marzipan in the potential deal synergies of the First Data merger that completed at the end of July. What’s needed is a catalyst to put some zest back in the shares. The calendar shows up a buy and sell side analyst day in early December at which the new management – a team who bears believe need to show the market some glitter – are likely to provide multi-year financial guidance. In a soon-to-be-cashless world, that guidance could well be something with a bit of heat in it.